Participant Communications:
It’s Not What You Say,
It’s What They Hear

Left to right: Greg Jenkins, Gary DeMoss:

PhotographybyCaseyKelbaugh

What you think you’re saying about your retirement plan may not be what
participants are hearing can be bad for you and for them.

Do retirement plan participants want financial freedom or financial security? Do they favor an investment that “protects” their
savings, or one that offers guarantees? The answers may surprise
you. Ten years ago, financial services firm Invesco began working
with word specialists and political consultants Maslansky Luntz +
Partners to find out how the language used by plan sponsors and
the financial services industry is actually heard by plan participants—and how those two groups might craft messages that resonate more effectively. Chief Investment Officer spoke recently
with Greg Jenkins, Managing Director and Head of Institutional
Defined Contribution for Invesco, and Gary DeMoss, Managing
Director, Participant Communications for Invesco Consulting,
to learn more about what Invesco has discovered over the past
decade; how investors’ responses to certain terms and ideas have
evolved over that time; and what the implications are for retirement plan sponsors, consultants and providers.

CIO: For anyone who hasn’t been tracking your work in this area,
what prompted you to begin studying the way retirement plan
participants respond to language?

Gary DeMoss: Our work goes back to 2006, when someoneasked us to listen to their sales people talk about variable annu-ities because they were having trouble getting more than a coreuniverse of advisors to sell their product. We did. They weretalking about “ratchets” and “resets” and so forth, and whenwe saw that people like us—people who work in the business—couldn’t understand what they were saying without sitting downand thinking it through, it left us wondering what their normalaudience was getting out of it. As it turned out, we had recentlystruck up a relationship with Michael Maslansky and his businesspartner, Frank Luntz, who were studying language in politics. Wedecided to do a study with them on the variable annuity prod-uct—which has since led to 17 other different studies on language.

CIO: What were some of the most important, or surprising, findings from your initial research?

DeMoss: The biggest surprise was around the word “guarantee.”
Back then, variable annuity marketers were big on “the guarantee.” You would think people would really like the word. But this
study took place right around the time of the financial crisis, and
we discovered that big macro events can change how language
is perceived. Whereas “guarantee” used to be a positive word,
after 2007 to 2009, people completely distrusted it. It came off